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August 2014

Reverse or Partial Charge Mechanism- Changes

By Tarun Ghia, Pratik Mehta, Brijesh Cholera Chartered Accountants
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Notification No. 10/2014-ST dated 11th July, 2014

In this connection, the principal notification notification No. 30/2012 – Service Tax, dated 20th June, 2012, vide number G.S.R. 472 (E), dated 20th June, 2012 was last amended by notification No. 45/2012-Service Tax, dated 7th August, 2012 vide number G.S.R. 621 (E), dated 7th August, 2012.

Now, by this Notification No.10/2014, certain amendments have been effected in percentages of service tax payable by the service provider and service recipient for certain specified services, which are summarised as under:

In relation to services provided by a recovery agent to a banking company or financial institution or NBFC – the recipient of service has to pay 100% of service tax.

In relation to services provided by director of a company or body corporate – the recipient of service has to pay 100% of service tax.

In relation to services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non-abated value to any person who is not engaged in the similar line of business – the percentage has been revised from 60:40 to 50:50 by service provider and service receiver respectively.

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